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Researching Vendor Issues

Part I

Over coffee a few weeks ago a client asked how they might better work with their vendors. She told me that her department has been working with the same four vendors for the last two years; but lately she feels that the relationship is not as good as it should be. Specifically, she noticed that over the 6 months, the performance of these long-term vendors was slipping:

  • Deadlines were being missed
  • There were cost overruns
  • Vendor committed resources that were unavailable or not the right fit
  • Quality issues were increasing in frequency

She had reviewed the Service Level Agreements (SLA) with each of the vendor, and none of the four were in compliance, though some were worse than others.  She wanted to plan of action prior she met with each of the vendors. And she wanted to do more than just tell them they were in breach of their SLA. I agreed that just telling the vendors they were in breach would just set up a conflict situation and put everyone on the defense. It was also odd that they were seeing issues with all four of their long-term vendors. I could see one, or even two, vendors becoming an issue but all four?

We decided to first look at what may be happening internally to cause an issue with the vendors. And then we would reach out to the vendors to survey how effectively they felt we (the client) were working with them.

Internal problems

To evaluate what was happening internally, we reached out to few key individuals within the organization who had been using the vendors for a number of years, and also reached out to some newer hires who have been using these vendors for the last 4 – 6 months. Here is what we learned:

  • Those who have been with the organization for a while did not have as much direct contact with the vendors as they had in the past due to organizational restructuring.
  • New hires who had been working with the vendors for the last 4 – 6 months had never seen the SLAs with the vendors.
  • Of the 10 new hires we spoke with, only one had ever met with the vendors, the others all worked virtually with vendors.
  • On average, over the last 6 months, 10 projects had been launched with vendors and each time the vendor assigned a different point of contact for the client. In the past the client had one point of contact at each vendor.

Survey to the vendors

A survey was sent to each of the vendors to inquire about the relationship with the client. Specifically, the survey asked what could be done better to more effectively work together on future initiatives. Here is what we learned:

  • While in the past there had been annual vendor meetings, there had not been one for at least 2 years.
  • When the organization was restructured, vendors lost their point of contact at the client.
  • New hires did not seen to have an understanding of the work the vendors did and vendors were frequently asked to do work that was out of scope.
  • There were no kick-off meetings with vendors and client points of contact prior to projects being launched.
  • Vendors were frequently brought onto projects much later than in the past and had very little or no involvement in the project planning phases.
  • Vendors were provided timelines to work against without being able to provide input as to whether the timeline was workable for the vendor.

In Part 2 we’ll share how we used this information to develop an action plan for resolving our vendor issues.

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